4. Related statutes or rules:
Not applicable.
5. Plain language analysis:
Under the proposed rules, the Division seeks to amend certain rules it administers in three respects.
First, it proposes to modify Wis. Admin. Code DFI-Bkg 8.01 (1), which currently defines a state bank branch as a “permanent” facility, to allow state banks to offer services through attended mobile or intermittent branches as well, subject to the approval of the Division. This change will enable banks to extend services to Wisconsinites in areas that may be underbanked and whose residents may be underserved, and to areas where permanent branches may not be feasible. Authorizing such branches also helps state banks maintain parity with national banks (which are authorized to operate mobile and intermittent branches), and state savings banks, state savings and loan associations, and state credit unions (which are not subject to rules limiting their branches to “permanent” locations).
Second, the Division proposes to update certain rules governing collection agencies, which are licensed by the Division, to reflect changes in industry practices during the 16 years since the existing rules were enacted. The proposed rules would clarify the meaning of the term “actual process of collection;” specify that a “terminated license” includes any license that has expired or been surrendered or revoked; clarify that a licensee’s trust checking account must be identified as a “trust account;” restrict third-party payment processors from withdrawing funds from a trust account; clarify that a collection agency may charge a contracted fee for reasonable costs incurred for each account placed in error by the creditor that is returned to the creditor; and require a collection agency to disclose and obtain Division approval for a trade name before using it to conduct business in the state.
Third, the Division proposes several non-substantive revisions to its rules to keep up to date with current law and drafting practices, including:
a. Eliminating obsolete rules identified by staff or in the rules report required under Wis. Stat., s. 227.29 (1) (c), or rules that conflict with other state or federal rules or statutes as provided under Wis. Stat. s. 227.29 (1) (d). b. Correcting erroneous cross-references to other state or federal rules or statutes.
c. Modifying the structure of existing rules in nonsubstantive ways to ensure that the rules are drafted to be substantially in the form and style used by the legislative reference bureau, and consistent with the manual prepared by the bureau and the legislative council staff, as provided in Wis. Stat., ss. 227.14 (1) and 227.15 (7). 6. Summary of, and comparison with, existing or proposed federal regulation:
Under federal law, a branch of a national bank may include “a mobile facility, a temporary facility, or an intermittent facility.” See 12 CFR § 5.30 (d) (1) (i). 7. Comparison with rules in adjacent states:
Most of Wisconsin’s neighboring states currently allow mobile banking, either explicitly, as does Michigan, or by defining a bank branch in a way that does not preclude a mobile branch, such as Iowa and Illinois. For Michigan, see Michigan Compiled Laws, section 487.3417 (1) and (2). Iowa law does not prohibit mobile banking, stating that “A state bank may establish and operate any number of bank offices at any location in this state subject to the approval and regulation of the superintendent.” See Iowa Code chapter 524, s. 524.1201 (1). Similarly, Illinois law does not prohibit mobile banking, stating that a bank organized under the Illinois Banking Act may “establish and maintain, in addition to the main banking premises, branches offering any banking services permitted at the main banking premises of a State bank”, and may also maintain an intermittent bank location at certain international fairs. See 205 ILCS 5/5 (15) and (18) Illinois Compiled Statutes ch. 205, section 5/5 subsections (15) and (18). 8. Summary of factual data and analytical methodologies:
The proposed changes are based on (1) the Division’s experience in administering chs. 214, 215, 218, 220, and 421 to 427 of the Wisconsin Statutes and the rules promulgated thereunder; (2) The Division’s belief that for Wisconsin state banks to have parity with national banks, as provided under Wis. Stat., s. 220.04 (8), and with state savings banks, state savings and loan associations, and state credit unions, DFI-Bkg 8.01 (1) must be amended to allow for mobile and intermittent branch banks; (3) The Division’s recognition that most of Wisconsin’s neighbors already allow mobile branch banks; (4) The Division’s knowledge of and experience working with current industry practices related to collection agencies, as those practices have evolved in the 16 years since the existing rules were enacted; (5) The Division’s knowledge of and desire to fix erroneous cross-references to other state or federal rules or statutes; and (6) The need to modify the structure of existing rules in nonsubstantive ways to be consistent with modern drafting practices of the legislative reference bureau and the form and style requirements of the bureau and the legislative council staff. 9. Analysis and supporting documents used to determine effect on small business or in preparation of an economic impact analysis:
N/A
10. Effect on small business:
These proposed rules would not have an immediate or measurable economic impact upon the Division or its licensees. While the availability of mobile branches may provide some economic benefit to the banks and customers who utilize them, those benefits are dependent on several variables and the Division is unable to estimate them in advance.
11. Agency contact person:
Kim Swissdorf
Administrator, Division of Banking
Wisconsin Department of Financial Institutions
PO Box 8861
Madison, WI 53708-8861
12. Place where comments are to be submitted and deadline for submission:
Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule order is conducted. Information as to the place, date and time of the public hearing will be published in the Wisconsin Administrative Register.
By mail: Marc Shovers, Assistant Chief Legal Counsel, Department of Financial Institutions, PO Box 8861, Madison, WI 53708-8861.
Rule Text
SECTION 1. DFI-Bkg 3.01 is repealed.
SECTION 2. DFI-Bkg 3.02 is repealed.
SECTION 3. DFI-Bkg 3.03 (intro.) and (1) are amended to read:
DFI-Bkg 3.03 (intro.) As part of its banking business and incidental thereto, a bank may collect, transcribe, process, analyze, and store, for itself and others, banking, financial, or related economic data. In addition, incidental to its banking business, a bank may do all of the following:
(1) Market a by-product (such as program or output) of a data processing activity described in this rule; and .
SECTION 4. DFI-Bkg 3.04 (5) is amended to read:
DFI-Bkg 3.04 (5) Unless otherwise provided by banking laws or regulations, pertinent book figures of the parent bank and its operating subsidiaries, except agricultural credit corporations, shall be consolidated for the purpose of applying applicable statutory limitations, including but not limited to s. 221.0319, 221.0320, 221.0324 or 221.0328, Stats. SECTION 5. DFI-Bkg 3.05 (1) (b) (intro.), 1., and 2. are amended to read:
DFI-Bkg 3.05 (1) (b) (intro.) A bank may enter into a lease financing transaction only if it can reasonably expect to realize a return of its full investment in the leased property, plus the estimated cost of financing the property over the term of the lease from all of the following:
1. Rental;.
2. Estimated tax benefits; and.
SECTION 6. DFI-Bkg 3.05 (1) (c) (intro.) and 1. to 4. are amended to read:
DFI-Bkg 3.05 (1) (c) (intro.) "Net lease" means a lease under which the bank will not, directly or indirectly, provide or be obligated to provide for any of the following:
1. The servicing, repair or maintenance of the leased property during the lease term; .
2. The purchasing of parts and accessories for the leased property. However, improvements and additions to the leased property may be leased to the lessee upon its request in accordance with any applicable requirements for maximum estimated residual value;.
3. The loan of replacement or substitute property while the leased property is being serviced;.
4. The purchasing of insurance for the lessee, except where the lessee has failed in its contractual obligation to purchase or maintain the required insurance; or.
SECTION 7. DFI-Bkg 3.05 (1) (d) (intro.) and 1. are amended to read:
DFI-Bkg 3.05 (1) (d) (intro.) If, in good faith, a bank determines that there has been an unanticipated change in conditions which threatens its financial position by significantly increasing its exposure to loss, the bank may do any of the following:
